Southeast Florida is home to most startup activity in US, report says

Southeast Florida is home to most startup activity in US, report says

Cheerleaders of South Florida’s entrepreneurial community, rejoice: the Miami-Fort Lauderdale-Pompano Beach metropolitan area has the highest level of startup activity in the country, says a new study that tracked entrepreneurial activity nationwide throughout 2016.

The region has for the past two years ranked No. 2 on the Startup Activity Index compiled and published by the Kauffman Foundation, a Kansas City, Missouri-based nonprofit that promotes entrepreneurship through research and initiatives. On Thursday, the metro area broke through to land the No. 1 spot on the list, ranking ahead of established technology hubs such as Austin (No. 2), New York (No. 7) and San Jose (No. 16).

"For years we’ve been rising up the ranks of the Startup Activity Index while harnessing our regional resources to support entrepreneurs," said Andrew Duffell, president and CEO of the Research Park at Florida Atlantic University. "Our collective efforts are gaining momentum and that is reflected in this new ranking."

Three metrics determine startup activity: rate of new entrepreneurs, opportunity share of new entrepreneurs and startup density.

Information gathered about South Florida’s startup community this past year boosted two of the three metrics.

The region’s rate of new entrepreneurs increased from .49 percent to .56 percent, meaning that, for every 100,000 locals, 560 became entrepreneurs in any given month.

Opportunity share of new entrepreneurs in South Florida also grew from 78.08 percent to 81.09 percent. This means more new startups were created by people who voluntarily left their current day jobs than by people who were unemployed and needed a way to pay the bills.

Startup density, on the other hand, slumped in 2016. South Florida’s startup density decreased from 113 to 107.8, meaning that, for every 1,000 companies of all ages, 108 were less than one year old.

Kauffman senior research analyst Arnobio Moralix said the decrease in startup density could be due to new businesses operating with just a founder and no other employees, an increasingly common company structure thanks to technology that allows for automation and operations streamlining.

It could also mean fewer companies are being created, though nationwide startup activity has consistently increased for the past three years after reaching its lowest level in two decades in 2013 as the country worked to recover from the recession.

“If you’re in Miami and you care about Miami you should be excited about this," Moralix said. "This index shows Miami is the metro in the country with the most new firms being created, most people trying entrepreneurship, most opportunity-driven businesses and new companies that will be hiring."

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